The Pakistan Stock Exchange (PSX) witnessed a remarkable surge on Friday, with the KSE-100 Index climbing 1.43% during intra-day trading. The index reached 115,662.87 points by midday, reflecting renewed investor confidence and strong market activity.
Robust Gains and Market Activity
The KSE-100 Index recorded a sharp increase of 1,625.08 points before trading paused for Friday prayers. It hit a peak of 115,696.40 points and a low of 114,383.16 during the session, maintaining strong positive momentum.
Trading volumes reached an impressive 144.6 million shares, with the total value of traded shares amounting to approximately Rs12.88 billion. These figures highlight robust investor participation and positive sentiment, supported by strong corporate earnings and easing political concerns.
Factors Driving Market Optimism
Analysts attribute the surge to several factors, including a $1.2 billion current account surplus for July-December 2024 and declining political risks. Expectations of a 100-basis-point interest rate cut by the State Bank of Pakistan (SBP) further boosted sentiment.
Additionally, speculation about an industrial power tariff reduction, following approval from the International Monetary Fund (IMF), has provided a positive outlook for key sectors.
Thursday’s Momentum Sets the Stage
The market rally on Friday followed a modest recovery on Thursday, driven by optimism around corporate earnings and lower bond yields. The KSE-100 Index had closed Thursday at 114,038 points, marking a gain of 594 points (1.43%) after reaching an intra-day high of 114,320 points.
Cement stocks and foreign corporate buying played pivotal roles in Thursday’s rally, setting the stage for Friday’s strong performance.
Read: KSE-100 Index Declines Amid Economic, Regulatory Concerns
Key Sector Performance
Cement and pharmaceutical stocks led the gains, with top performers including Engro, PSO, Fauji Cement, The Searle Company, and Maple Leaf Cement. These companies made significant contributions to the index’s upward movement.
On the other hand, UBL, Fauji Fertilizer Company, and Meezan Bank were among the lagging stocks. Despite their underperformance, the overall market sentiment remained positive.
Focus Shifts to Monetary Policy Decision
As investors await the SBP’s monetary policy meeting on Monday, market sentiment remains optimistic. A 100bps rate cut, which would lower the interest rate to 12%, is widely anticipated. If implemented, this could further strengthen investor confidence and support economic growth.
Weekly Performance and Investor Trends
Despite the positive close on Friday, the KSE-100 Index ended the week down by 1.07% on a week-on-week basis. However, foreign investors were net sellers during the session, offloading shares worth Rs77.4 million.
Trading volume for the week stood at 675.5 million shares, with notable activity from Cnergyico PK, WorldCall Telecom, and Fauji Cement.
Outlook for the Coming Week
The focus now shifts to Monday’s monetary policy announcement and its potential impact on the market. With strong corporate earnings and easing economic pressures, the PSX remains poised for further gains. Investor optimism continues to drive activity, signaling a positive outlook for the near term.
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